Enterprise resource planning (ERP) is the integrated management of core business processes, often in real-time and mediated by software and technology.
ERP is usually referred to as a category of business-management software — typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from these many business activities.
ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions and manages connections to outside stakeholders.
Enterprise system software is a multibillion-dollar industry that produces components supporting a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the pastwhich decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.
The ERP system integrates varied organizational systems and facilitates error-free transactions and production, thereby enhancing the organization’s efficiency. However, developing an ERP system differs from traditional system development. ERP systems run on a variety of computer hardware and network configurations, typically using a database as an information repository.
Not all ERP packages developed from a manufacturing core; We began assembling our packages with Finance & Accounting, maintenance, and human-resource components. ERP systems addressed all core enterprise functions. Governments and non–profit organizations.
ERP systems experienced rapid growth in the 1990s. Because of the year 2000 problem and the introduction of the euro that disrupted legacy systems, many companies took the opportunity to replace their old systems with ERP.
Ofits ERP system initially focused on automating back office functions that did not directly affect customers and the public. Front office functions, such as customer relationship management (CRM), dealt directly with customers, or e-business systems such as e-commerce, e-government, e-telecom, and e-finance—or supplier relationship management (SRM) became integrated.
ERP Is Dead—Long Live. It describes web–based software that provides real–time access to ERP systems to employees and partners (such as suppliers and customers). The ERP role expands traditional ERP resource optimization and transaction processing. Rather than just manage buying, selling, etc.—ERP leverages information in the resources under its management to help the enterprise collaborate with other enterprises. ERP is more flexible. Rather than confine ERP system capabilities within the organization, it goes beyond the corporate walls to interact with other systems. Enterprise application suite is an alternate name for such systems. ERP system is typically used to enable collaborative initiatives such as supply chain management (SCM), customer relationship management (CRM), and business intelligence (BI) among business partner organizations through the use of various e-business technologies.
Developers now make more effort to integrate devices with the ERP system. We are extending ERP to these devices, along with other business applications. Technical stakes of modern ERP concern integration—hardware, applications, networking, supply chains. ERP now covers more functions and roles—including decision making, stakeholders’ relationships, standardization, transparency, globalization, etc
The most fundamental advantage of ERP is that the integration of myriad business processes saves time and expense. Management can make decisions faster and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include:
- Sales forecasting, which allows inventory optimization.
- Chronological history of every transaction through relevant data compilation in every area of operation.
- Order tracking, from acceptance through fulfillment
- Revenue tracking, from invoice through cash receipt
- Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)
ERP systems centralize business data, which:
Eliminates the need to synchronize changes between multiple systems—consolidation of finance, marketing, sales, human resource, and manufacturing applications
Brings legitimacy and transparency to each bit of statistical data
Facilitates standard product naming/coding
Provides a comprehensive enterprise view (no “islands of information”), making real–time information available to management anywhere, anytime to make proper decisions
Protects sensitive data by consolidating multiple security systems into a single structure
ERP can improve quality and efficiency of the business. By keeping a company’s internal business processes running smoothly, ERP can lead to better outputs that may benefit the company, such as in customer service and manufacturing.
ERP supports upper level management by providing information for decision making.
ERP creates a more agile company that adapts better to change. It also makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business—internally and externally.
ERP can improve data security. A common control system, such as the kind offered by ERP systems, allows organizations the ability to more easily ensure key company data is not compromised.
ERP provides increased opportunities for collaboration. Data takes many forms in the modern enterprise. Documents, files, forms, audio and video, emails. Often, each data medium has its own mechanism for allowing collaboration. ERP provides a collaborative platform that lets employees spend more time collaborating on content rather than mastering the learning curve of communicating in various formats across distributed systems.
ERP systems typically include the following characteristics:
An integrated system
Operates in (or near) real time
A common database that supports all the applications
A consistent look and feel across modules
Installation of the system with elaborate application/data integration by the Information Technology (IT) department, provided the implementation is not done in small steps